FI Morning Grain Comments 02/02/21

PDF attached

 

Morning.

 

Lower
trade in US soybeans, corn and wheat on fund selling and higher USD. Malaysian palm oil futures fell 99 MYR and cash dropped 2.2% after coming back from a one day holiday.  China soybean futures fell 1.4%, meal off 0.8% and SBO was down 1.3%.  Offshore product
values are indicating a lower trade for meal and oil.  Corn is back below $5.50.  Results are awaited on Egypt in for wheat and Jordan in for barley.  South Korea’s KOCOPIA bought about 60,000 tons of corn at an estimated $300.84 a ton c&f for arrival in South
Korea around April 25. China will sell 30,000 tons of frozen pork from state reserves on February 4, and another 30,000 tons on Feb. 9.

 

 

 

Weather

 

 

 

Bloomberg
Ag Calendar

Tuesday,
Feb 2:

• U.S.
  Purdue Agriculture Sentiment
• New
  Zealand global dairy trade auction
• U.S.
  corn for ethanol, 3pm

Wednesday,
Feb 3:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• New
  Zealand Commodity Price

Thursday,
Feb 4:

• FAO
  World Food Price Index; cereals supply/demand brief
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Feb 5:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• China’s
  CNGOIC to publish soybean and corn reports
• Statcan
  reports on wheat, soy, durum, canola and barley stockpiles in Canada

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
396,873         versus   350000-550000  range

Corn             
1,104,721     versus   1000000-1350000             range

Soybeans   
1,792,367     versus   1100000-2150000             range

 

Macros

WTI
Reaches $55/bbl For First Time In A Year

 

 

 

 

Corn.

• Corn
  futures are lower on fund liquidation and higher USD despite higher energy markets.   The march corn contract fell below a phycological $5.50 level.  South Korea’s KOCOPIA bought about 60,000 tons of corn.
  
• USDA
  NASS reported Dec corn for ethanol use at 430 million bushels, near our expectations, but well down from a Bloomberg trade average of 446 million.  It was slightly below November and well below 479 million in December 2019. 
  

• China
  will sell 30,000 tons of frozen pork from state reserves on February 4, and another 30,000 tons on Feb. 9.
• StoneX
  sees the Brazil corn crop at 110.2 million tons versus 109.34 million tons previously.  Conab has been much lower than selected trade estimates for the Brazilian corn crop.  Recent rains should have been beneficial to see an increase in the yield.  We think
  Conab will raise their Brazilian corn crop estimate later this month to 103.03 million tons from 102.31 million tons in January. 
  
• Soybean
  and Corn Advisory:
• 2020/21
  Brazil Corn Estimate Unchanged at 105.0 Million Tons
• 2020/21
  Argentina Corn Estimate Unchanged at 44.5 Million Tons

• The
  European Union granted imports licenses for 188,000 tons of corn imports, bringing cumulative 2020-21 imports to 9.661 MMT, 27 percent below same period year ago

 

Corn
Export Developments

·        
Under the 24-hour announcement system private exporters sold 115,000 tons of corn to Mexico for 2020-21 delivery. 

·        
South Korea’s KOCOPIA bought about 60,000 tons of corn at an estimated $300.84 a ton c&f for arrival in South Korea around April 25.

 

 

 

Soybean
complex.  

• The
  soybean complex hit overnight lows near below the electronic close. A roughly 20 cent pullback is not all that surprising as US exports are starting to slow.  Yesterday’s NASS crush report was near expectations. March this morning at the pause was at $13.4525. 
  Note $12.98 was the absolute low on Jan 25.  A setback to that level would be a chart head and shoulders technical bearish indication.  The USD hit a two-month high.  Additional fund selling is not out of the question but some commercial buying may emerge
  today.  Favorable
  weather is seen for Argentina and most of Brazil.  Some parts of Brazil will remain too wet for harvest this week.  Malaysian palm oil futures fell 99 MYR and cash dropped 2.2% after coming back from a one day holiday.  China soybean futures fell 1.4%, meal
  off 0.8% and SBO was down 1.3%.  Offshore product values are indicating a lower trade for meal and oil. 
  
• After
  the close NASS reported the December crush near expectations at 193.7 million bushels and stocks also near expectations at 2.219 billion pounds.  See out table below. 
  
• Note
  the Brazilian trucker strike started yesterday. 
• Yesterday
  Brazil reported Jan soybean exports were 49,498 tons in January versus 1.4 million tons a year earlier and corn exports were 2.55 million tons versus 2.1 million tons year earlier.  StoneX sees the Brazil soybean crop at 132.77 million tons versus 132.6 million
  tons previously.  We think Conab will raise their Brazilian crop estimate later this month to 134.5 million tons from 133.7 million tons in January.  Soybean and Corn Advisory:
• 2020/21
  Brazil Soybean Estimate Increased 1.0 mt to 130 Million
• 2020/21
  Argentina Soybean Estimate Unchanged at 46.0 Million Tons
• The
  European Union reported soybean import licenses since July 1 at 8.758 million tons, above 8.169 million tons a year ago. European Union soybean meal import licenses are running at 10.177 million tons so far for 2020-21, below 10.557 million tons a year ago.
  EU palm oil import licenses are running at 3.379 million tons for 2020-21, above 3.290 million tons a year ago, or up 3 percent.
• European
  Union rapeseed import licenses since July 1 were 3.975 million tons, down 6 percent from 4.234 million tons from the same period a year ago.
• Offshore
  values are leading the CBOT soybean oil 58 points lower and meal $2.60 lower. 
  
• Malaysian
  palm oil futures: 

• China
  cash crush margins were 199 cents on our calculation (167 previous), compared to 171 at the end of last week and to 84 year ago.
  

• China

 

 

 

 

Oilseeds
Export Developments

·        
Results awaited: Egypt’s GASC seeks at least 30k soybean oil and 10k sunflower oil on Feb 2 for March 10-30 arrival. 

 

Wheat

• US
  wheat fell on follow through buying and a higher USD (hit a 2-month high).  Results are awaited on Egypt in for wheat and Jordan in for barley.  EU wheat is lower but losses are limited as traders await the Egypt wheat import tender results. 
  

 

• The
  US central areas and northern Great Plains will see two cold shots this week, raising the risk of some winterkill for uncovered snow areas. 
  

• EU
  March milling wheat was down 0.75 at 222.75 euros.
• The
  European Union granted export licenses for 291,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 14.987 MMT, well down from 18.018 million tons committed at this time last year, a 17 percent decrease.  Imports are
  down slightly from year ago at 1.472 million tons.

 

Export
Developments.

• Egypt
  seeks wheat for March 15-30 shipment.  Lowest offer for Egypt’s GASC wheat import tender was $293.75 per ton for 60,000 tons of French wheat.  Some are saying Russia was cheaper. 
  
• Japan
  seeks 87,050 tons of food wheat this week. 
• 7
  offers: Jordan is in for another 120k wheat on Feb 3 and 120k barley on Feb 2. 
  

 

Rice/Other

·        
CME Raises COMEX Silver Futures Margins By 18%

·        
Iraq seeks 30,000 tons of rice on Feb 3, valid until Feb 10, optional origin.

·        
Syria is in for 25,000 tons of rice on February 9.